Nifty 50 vs. Laggard Stocks: A Five-Year Wealth Creation Story

Between August 2020 and August 2025, the Nifty 50 index has delivered ~75–80% absolute returns, translating into a healthy 12% CAGR. This performance was powered by leadership in banking, IT, energy, infrastructure, and manufacturing.

In contrast, a basket of once-popular but now underperforming stocks — spanning FMCG, footwear, chemicals, and telecom — delivered close to 0% absolute returns over the same period (–1% to +1% CAGR).

Put simply:
• ₹10 lakh invested in the Nifty 50 in 2020 → ~₹17.5–18 lakh today.
• ₹10 lakh invested in these laggards → still ~₹10 lakh (or lower).
This divergence shows how sectoral rotation, valuation discipline, and structural shifts decide wealth creation in markets.

Why These Stocks Lagged Behind Nifty

1. Goodyear (0%)
• Tyre demand growth muted compared to outperformers like MRF/CEAT.
• Export and OEM slowdown restricted topline.
• A cyclical play without strong growth triggers.

2. SBI Card (0%)
• IPO priced at expensive multiples (50–60x PE).
• Fintech, UPI, and BNPL ate into growth.
• Loan book lagged broader banking recovery.

3. IGL (0%)
• CNG adoption in Delhi NCR saturated.
• Policy uncertainty on gas pricing.
• Expansion to new cities too slow.

4. Venky’s (+1%)
• Poultry remains a commodity business.
• Raw material volatility (maize, soy) erodes profits.
• No long-term compounding story.

5. Dabur (+0.5%)
• Low single-digit volume growth.
• Expensive valuations (~60x PE).
• Competitive heat from Patanjali and regional FMCG players.

6. Berger Paints (+2%)
• Valuations peaked 2016–20.
• Asian Paints dominance + Grasim entry.
• Margin pressure from crude-linked raw materials.

7. Atul (+1%)
• Specialty chemicals cycle peaked in 2020–21.
• China’s supply comeback + weak exports.
• Market rotated to PSU/infra/defence themes.

8. Biocon (–1%)
• Biosimilar ramp-up slower than promised.
• FDA issues and delayed approvals.
• Investor patience ran out → derating.

9. Bata (–2%)
• Post-COVID demand for formal wear weak.
• Competition from Metro, Relaxo, Campus.
• Expensive valuations vs. low growth.

10. PVR (–2%)
• OTT streaming structurally hit cinema business.
• PVR-Inox merger failed to restore momentum.
• Investors shifted to digital consumption.

11. Relaxo (–4%)
• Input costs (rubber, EVA) squeezed margins.
• Weak demand in mass footwear.
• Lost share to Bata/Metro/Campus.

12. Vodafone Idea (–3%)
• Debt + AGR dues + tariff wars.
• Market share ceded to Jio & Airtel.
• Survival mode, not growth mode.

The Big Picture: Why the Index Outperformed
• Leadership Shift – Nifty’s gains came from PSU banks, defence, infra, railways, and manufacturing themes these laggards missed.
• Valuation Traps – Over-owned defensives (FMCG, paints, footwear) were priced for perfection in 2020, leaving no upside.
• Disruption – Telecom, footwear, FMCG, and entertainment saw structural disruption (UPI, OTT, regional brands).
• Global/Regulatory Headwinds – Pharma and chemicals faced China competition and

In simple terms: The index rewarded growth + rotation, while laggards stayed stuck in disruption or expensive defensives.

Looking Ahead: Potential Wealth Creators (2025–2030)

Large Cap – Steady Compounders
• Reliance Industries – Energy, retail, and digital powerhouse.
• HDFC Bank – Credit growth + pristine asset quality.
• TCS – Global IT demand resilience.

> Expected CAGR: 12–15% (reliable compounding).

Mid Cap – Growth Engines
 Persistent Systems – Cloud & AI adoption tailwind.
 Polycab India – Rapid expansion in wires & cables.
 CAMS – Mutual fund penetration story.

> Expected CAGR: 15–20%.

Small Cap – Potential Multibaggers
• Ice Make Refrigeration Ltd – Cold chain & ESG cooling solutions.
• KPI Green Energy – Solar & renewables aligned with policy push.
• Vaibhav Global – Niche e-commerce global play.

> Potential: 3–5x in five years, with execution risks.

Key Insights for Investors
• Large Caps = Core stability.
• Mid Caps = Blend of stability + growth.
• Small Caps = Selective, high-reward bets.

A balanced portfolio across these three categories is the best way to compound wealth while managing risks in the coming decade.